Environmental Law – NGT – Abdication of Adjudicatory Functions – Expert Committee – Petrol pump sought to be established on a National Highway in a commercial area designated under the Haridwar Master Plan 2025 – First respondent approached the NGT alleging violation of CPCB siting guidelines (50-metre distance from schools, hospitals, and designated residential areas) – NGT, without adjudicating on merits, delegated the decision to a committee and disposed of the petition – On execution petition, NGT directed compliance on the first date without notice to the parties – Held: NGT grossly abdicated its adjudicatory powers by entrusting a committee to decide on compliance and disposing of the matter without any finding – Expert committees constituted by courts are meant to assist adjudication, not to adjudicate – Adjudicatory functions conferred on the NGT under Sections 14 and 15 of the NGT Act cannot be delegated to committees, even expert committees – Both impugned orders set aside [Paras 3, 10–14, 16, 19–20].

Natural Justice – NGT – Execution Petition – Order Without Notice – The NGT disposed of the execution petition on the first date of consideration without issuing notice to the respondents and without considering the contents of the committee report – Held: Such disposal is in clear violation of Section 19(1) of the NGT Act which expressly mandates compliance with principles of natural justice – The NGT cannot blindly adopt the conclusion of a fact-finding committee without giving parties an opportunity to object [Paras 5, 13, 19].

CPCB Siting Guidelines – Designated Residential Area – Compliance – The CPCB guidelines require a minimum 50-metre distance from schools, hospitals (10 beds and above), and residential areas designated as per local laws – In the present case, the proposed site was situated in a commercially designated area as per the Haridwar Master Plan 2025 – The single residence and residential colony found in the vicinity were not within a designated residential area under local laws – Play school in the vicinity was no longer operational – High-tension line was approximately 5 metres from the site, not passing overhead – Third committee report found full compliance with CPCB guidelines – Held: No violation of siting guidelines established on record [Paras 2, 16–18].

Locus Standi – NGT – Petitioner with No Perceivable Grievance – The first respondent had no residence in the vicinity of the proposed site and could not satisfactorily explain his locus before this Court – Held: A remand would be prejudicial to the appellants and the public interest in establishing a public utility outlet, particularly when the reports are clear and locus of the complainant is doubtful – Matter not remanded [Paras 9, 19–20].

Decision: Appeals allowed – Orders of the NGT dated 01.02.2021 and 11.11.2022 set aside – District Magistrate, Haridwar directed to consider the matter afresh, obtain statutory clearances as required, and permit establishment of the petrol pump if in compliance with extant laws.

Motor Vehicles Act – Liability – Requisitioned Vehicle – Determination of “Owner” – Bus requisitioned by District Election Officer for Gram Panchayat elections caused fatal accident – High Court shifted liability from insurer to State authority – Held: During period of requisition, control and possession vest with State – Registered owner loses effective control – Person in control and possession deemed “owner” under Section 2(30) – Liability rightly fastened on requisitioning authority [Paras 5-7].

Insurance Liability – Scope of Policy – Vehicle used under statutory requisition – Insurance contract contemplates ordinary use by insured – Compelled use for public purpose beyond control of insured not covered within normal risk – Insurer cannot be made liable for risks arising out of State-controlled deployment – Extending liability would unjustly enlarge contractual risk [Paras 9].

State Liability – Requisition of Private Property – When State exercises statutory power to requisition vehicle, it assumes complete control and corresponding responsibility – Owner divested of possession and decision-making power – Liability for accident during such period must rest with State authority – Principle of control determines liability [Paras 9].

Distinction – Requisition vs Contractual Use – Cases where vehicles operated under agreement distinguishable – In contractual arrangements, insurer may remain liable – However, in statutory requisition (compulsory takeover), liability shifts to State – Earlier rulings on contractual operation not applicable [Para 10].

Driver’s Status – Implied Acceptance by State – Though statute does not expressly provide for requisition of driver, authorities often utilize driver along with vehicle – By accepting services of driver, State implicitly acknowledges competence and assumes operational control – Reinforces State’s liability [Para 11].

Motor Accident Compensation – Liability Determination – Tribunal awarded compensation – High Court enhanced compensation and shifted liability to State – Supreme Court upheld High Court’s findings – No error in fastening liability on State authority instead of insurer [Paras 2-4, 7].

Decision: Appeal dismissed – Liability of compensation upheld against requisitioning authority (State) – Insurer absolved – No interference with impugned judgment.

Insolvency and Bankruptcy – Corporate Insolvency Resolution Process (CIRP) – Moratorium – Section 14 IBC – Security Deposit – Appropriation of Pre-CIRP Dues – Appellant (CTUIL) held a cash deposit of Rs. 108.44 crores from the Corporate Debtor (KMPCL) as a Payment Security Mechanism (PSM) in lieu of a Letter of Credit – After CIRP commenced on 03.10.2019, the Appellant adjusted Rs. 85.13 crores against bills raised prior to the commencement date – NCLT and NCLAT held such appropriation illegal – Held: A security deposit remains the property of the entity making the deposit until a valid adjustment is made; once the moratorium under Section 14 IBC kicks in, the recovery of pre-CIRP dues must concede to the procedure envisaged in the IBC; the creditor must file a claim before the Resolution Professional rather than resorting to unilateral appropriation; such adjustment after the insolvency commencement date violates the moratorium and the pari passu principle [Paras 1–4, 13, 24–25].

Insolvency Law – Set-off in CIRP – Contractual and Equitable Set-off – Applicability – Appellant argued a right of set-off as the title to the money was impeached upon default – Held: Statutory set-off under CPC or insolvency set-off under Liquidation Regulations does not apply to CIRP; contractual set-off is permissible only if it occurred before or on the date the CIRP was put in motion; set-off of dues payable by the Corporate Debtor for a period prior to the commencement of CIRP cannot be made from dues payable to or assets held for the Corporate Debtor post-commencement; the deposit in question was an asset of the Corporate Debtor as on the insolvency commencement date and was not amenable to set-off post-moratorium [Paras 14–19, 22].

Insolvency and Bankruptcy – Nature of Security – Letter of Credit (LoC) vs. Cash Deposit – Section 14(3)(b) IBC – Appellant contended the deposit was in lieu of an LoC which could be enforced despite CIRP – Held: Even if the deposit were equated to an LoC, its encashment or enforcement after the insolvency commencement date is prohibited by the moratorium under Section 14; Section 14(3)(b) refers to a contract of guarantee to a Corporate Debtor (enforceable for the benefit of the CD) and not from the CD; an operational creditor cannot use a security deposit to bypass the priority of claims established under the IBC; the deposit must be reckoned as an asset of the Corporate Debtor for the purposes of the Resolution Plan [Paras 20–22, 25].

Decision: Appeals dismissed – Orders of NCLT and NCLAT affirmed – The apportionment of pre-CIRP dues from the security deposit after 03.10.2019 held violative of Section 14 IBC – Appellant directed to satisfy pre-CIRP dues through the claim process admitted by the Resolution Professional.

Service Law – Public Recruitment – Select List – No Right to Claim Vacancy Arising from Non-Joining of Selected Candidate – Karnataka Recruitment of Gazetted Probationers Rules, 1997, Rules 4(3) and 11 – KPSC issued notification in 2011 for 362 posts of Gazetted Probationers – Respondent (ex-serviceman) was selected and appointed as Assistant Commissioner of Commercial Taxes, Group A – Another candidate selected for the post of Assistant Commissioner, Karnataka Administrative Service, Group A (GM/Ex-MP category) did not undergo mandatory medical examination or police verification and did not report for duty – Respondent claimed that as the candidate immediately next below, the unfilled post ought to be offered to him – DPAR rejected the claim holding that the 1997 Rules contain no provision for an additional select list and that the vacancy must be treated as a fresh vacancy – Tribunal upheld the rejection – High Court allowed the writ petition holding that the vacancy remained unfilled since the selected candidate had not undergone the mandatory medical examination, and directed consideration of the respondent – Held: High Court erred – The 1997 Rules contemplate service-wise lists prepared equal to the number of notified vacancies and do not provide for any reserve, waiting, or additional list – A vacancy arising from non-completion of pre-appointment formalities or non-joining by a selected candidate cannot be claimed as of right by the next candidate below [Paras 6–10, 19–20].

Select List – Nature and Scope – Inclusion Does Not Confer Indefeasible Right to Appointment – Rule 11 of the 1997 Rules provides for preparation of separate service-wise lists equal to the number of available vacancies – The list is not an open-ended reservoir of candidates and ceases to operate once the notified vacancies are filled or the selection process has run its course – The first proviso to Rule 11(3) makes clear that inclusion in the list does not by itself result in appointment, which remains subject to Government satisfaction as to suitability – The Rules contain no enabling provision permitting the State to revert to the same list and travel downward to fill a post left unfilled by a selected candidate – Held: The statutory scheme does not permit such operation of the select list beyond its statutory framework [Paras 7–9, 15].

Preference-Based Allocation – Multi-Service Recruitment – Post Facto Adjustment Not Permissible – Sub-rule (3) of Rule 4 requires candidates to indicate their order of preference and debars consideration for posts not preferred – Recruitment being to multiple services and groups of posts in Group A and Group B, the process was one of service-wise selection and allocation against notified vacancies – Any post facto adjustment upon non-joining of a selected candidate would unsettle a service-wise and preference-based allocation exercise which had already attained finality – Respondent's claim to be shifted to another post, in the absence of express statutory sanction, cannot be sustained [Paras 13, 16].

Validation Act – Legislative Finality – Karnataka Civil Services (Validation of Selection and Appointment of 2011 Batch Gazetted Probationers) Act, 2022, Section 3 – The Validation Act validates the KPSC's 2011 batch selection and mandates issuance of appointment orders as per the KPSC selection list – It further bars any suit or proceeding for review of such appointments – Any direction reopening the concluded 2011 process and compelling recourse to a mode of appointment not contemplated by the 1997 Rules would be plainly inconsistent with this legislative finality [Para 18].

Decision: Appeal allowed – Impugned judgment and order dated 21.04.2025 of the High Court of Karnataka set aside – Writ Petition No. 24455 of 2023 (S-KSAT) dismissed – Order of the Karnataka State Administrative Tribunal dated 13.10.2023 and communication of DPAR dated 27.06.2022 restored.

Arbitration – Manning Agreement – Excepted Matters – Interpretation of Default Clause and Arbitration Clause – Rule of Law – Appellant entered into a Manning Agreement with the Andaman and Nicobar Administration for manning 17 vessels – Vessel M.V. Long Island grounded, and the Administration unilaterally recovered Rs. 2,87,84,305/- from the appellant's pending bills as penalty – Appellant disputed liability – Matter referred to arbitration before a former Judge of this Court – Arbitrator held Clause 3.20 void under Section 28 of the Contract Act, construed Clauses 3.20 and 3.22 harmoniously, and awarded the recovered amount with interest – District Judge upheld the award – High Court set aside the award holding the dispute fell within the "excepted matter" of Clause 3.20 – Held: High Court's reasoning is seriously flawed – Clause 3.20 can only operate in cases where the Manning Agent does not dispute liability – Where liability itself is disputed, the administration cannot act as judge in its own cause – The arbitration clause (Clause 3.22) being widely worded covers all disputes and prevails in cases of disputed liability – Award restored [Paras 20–29, 40–44].

Contract Law – One Party Cannot Be Decision-Maker on Disputed Breach – Fundamental Rule of Law – A contract cannot provide that one party will be the arbiter to decide whether it has committed breach or the other party has committed breach – Where the Manning Agent disputed wilful action or negligence on its part, the question of liability could only be decided by an adjudicatory forum, i.e., a court or arbitral tribunal – Administration's decision is final and binding only in cases where liability is admitted and the administration proceeds to quantify the amount – Held: The administration's claim to decide disputed liability and place such decision beyond all judicial scrutiny is opposed to the fundamental principle that no party shall be a judge in its own cause – Rule of Law is not alien to interpretation of contractual clauses, especially where the State and its instrumentalities are parties [Paras 25–28, 33–34].

Contract – Clause Barring Both Court Proceedings and Arbitration – Void – Vacuum in Legal Remedies Impermissible – Section 28 of the Indian Contract Act, Section 9 CPC – Clause 3.20 purported to bar recourse both to courts of law and to arbitration, leaving the Manning Agent remediless – Held: No construction shall be placed on a contract that leads to a vacuum in legal remedies – The maxim ubi jus ibi remedium admits no exception – Matters may be excepted from arbitration, but exclusion of all judicial remedies cannot be countenanced – Such clauses must not be incorporated in contracts between private parties and the State – "Except matters one may, but exclude justice, one cannot" [Paras 30–33, 38–39].

Arbitral Award – Scope of Jurisdiction – Section 37 of Arbitration and Conciliation Act – The arbitrator rightly interpreted Clauses 3.20 and 3.22 harmoniously to hold that the dispute was arbitrable – Arbitrator correctly found that the Manning Agent's duty was limited to recruiting and placing seafarers with the technical agent, that seafarers' employment contracts were with the technical agent, and that the Manning Agent had no on-board functions or obligation for safe operation of the ship – These findings being within the domain of the arbitrator, the High Court exceeded its jurisdiction under Section 37 in interfering with the award [Paras 40–43].

Decision: Appeals allowed – Judgment and order dated 11.07.2018 of the High Court at Calcutta (Circuit Bench, Port Blair) set aside – Arbitral award dated 08.05.2017 restored – No order as to costs.

Environmental Law – Forest (Conservation) Act, 1980 – Deemed Forest – Statutory Master Plan – Primacy – Subject land acquired in 1986 as agricultural land, allotted to Railways in 2008 for development of Bijwasan Integrated Metropolitan Passenger Terminal, incorporated in Master Plan of Delhi 2021 for mixed-use development – RFP issued in 2022 – Challenged before NGT on the ground that approximately 1100 trees on subject land make it deemed forest requiring prior Central Government approval under Section 2 of 1980 Act – NGT dismissed OA – Held: Land earmarked under a duly approved statutory Master Plan, which was not forest land or deemed forest at the time of its coming into force, cannot subsequently be declared a deemed forest overriding the statutory binding force and sanctity of such Master Plan – Subsequent growth of vegetation or increase in tree cover does not alter the legal character of land for purposes of 1980 Act – Relevant date for determining nature of land as deemed forest is the date of coming into force of the Master Plan – Appeal dismissed [Paras 25, 47, 60, 65].

Deemed Forest – Definition and Scope – T.N. Godavarman Principle – The word "forest" must be understood in its dictionary meaning and the 1980 Act applies to areas recorded as forest in government records irrespective of ownership – Concept of deemed forest evolved to extend protection beyond formally notified forests – However, mechanical application of T.N. Godavarman without regard to historical land use and contemporaneous official records is impermissible – Determination of whether land is deemed forest must take into account historical character, revenue records, and the planning framework within which land is situated – Subject land was recorded as agricultural land at time of acquisition and was not treated as deemed forest at time of Master Plan formulation – Subsequent proliferation of vegetation, especially invasive species, cannot alter legal status [Paras 27-32, 44-48, 58-60].

Master Plan – Statutory Force and Finality – A Master Plan is not a mere policy document but a statutory planning instrument with binding force on all stakeholders once approved and notified by competent authority – Development projects under a Master Plan are conceived based on conditions prevailing at time of its formulation – If subsequent natural changes in vegetation were to unsettle operation of a Master Plan, it would introduce perpetual instability into statutory planning – Courts and tribunals cannot mandate fresh plans or interfere with implementation of a finalised Master Plan under guise of applying environmental principles – Sanctity and statutory binding force of Master Plan shall prevail – No permission under Section 2 of 1980 Act required where land was not forest or deemed forest at time of Master Plan's coming into force [Paras 38-48, 60].

Invasive Species – Ecological Character of Land – Mere presence of vegetation, particularly invasive alien species introduced through historical human intervention, does not signify the presence of a natural forest ecosystem – Approximately 70% of trees on subject land comprise invasive species such as Vilayati Kikar (Prosopis juliflora) and Subabul – Invasive species displace indigenous vegetation, reduce biodiversity, disrupt food chains and alter soil and hydrological conditions – In assessing whether land possesses forest ecosystem character, distinction must be drawn between naturally evolved indigenous vegetation and invasive species which may signify ecological disturbance – Directions issued to plant native/indigenous trees and replace invasive species [Paras 49-54, 66-67].

Environmental Safeguards – Undertakings – Respondents RLDA and Ministry of Railways undertook to obtain all necessary permissions including under 1980 Act for patches identified as deemed forest before carrying out any work – RFP mandates obtaining all statutory clearances – 20% of project area to be maintained as green land – Tree transplantation and compensatory afforestation to be undertaken strictly in accordance with applicable provisions – All implementing agencies directed to ensure transplantation of native/indigenous trees to maximum extent possible [Paras 61-63, 67].

Decision: Appeal disposed of – NGT order upheld – Land earmarked under Master Plan held not to be deemed forest – Relevant date for determination is date of coming into force of Master Plan – Respondents directed to obtain all statutory permissions for identified patches and to carry out compensatory afforestation before commencement of work – Native tree plantation directed – Contempt Petition (C) No. 860 of 2024 also disposed of – No order as to costs [Paras 64-71].

Insolvency and Bankruptcy Code, 2016 – Resolution Plan – Extinguishment of Claims – Clean Slate Principle – Arbitration – Set-off as Defence – Appellant-corporate debtor admitted into CIRP in 2020 – Arbitration invoked by resolution professional – Respondent filed counterclaim before Tribunal but failed to raise its claim before the Resolution Professional during CIRP – Resolution plan approved by NCLT on 13/10/2023 – Tribunal allowed appellant's application under Section 31(6) of A&C Act and rejected counterclaim vide interim award – Single Judge upheld – Division Bench set aside and directed Tribunal to continue proceedings including counterclaim – Held: On approval of resolution plan, all claims not forming part thereof stand extinguished; respondent cannot pursue counterclaim independently or seek affirmative relief – However, respondent permitted to raise plea of set-off as a defence, to the limited extent of defending against appellant's claim, and not to recover any surplus – Appeal partly allowed – Impugned order of Division Bench modified [Paras 8-27].

Clean Slate Principle – Section 31(1), IBC – Effect of Approval of Resolution Plan – Once resolution plan is approved by adjudicating authority, it is binding on all stakeholders and all claims not forming part of resolution plan stand extinguished – Respondent's counterclaim, raised before Tribunal but not lodged before Resolution Professional and not included in resolution plan, held extinguished – Respondent cannot seek any affirmative or independent relief from Tribunal on the basis of such counterclaim [Paras 10-13].

Set-off – Plea of Defence – Paragraph 12.4.1 of Resolution Plan – Resolution plan bars all "payments/settlements" in respect of claims not raised before Resolution Professional, including counterclaims in pending arbitration – However, plain language of Paragraph 12.4.1 does not expressly bar a plea of set-off raised purely as a defence – Applying maxim expressio unius est exclusio alterius, intention to exclude defensive plea of set-off cannot be inferred where it is neither expressly included nor expressly barred – Respondent permitted to raise set-off as defence only; no affirmative or surplus recovery permissible – If arbitration withdrawn by appellant, counterclaim/defence of respondent also fails [Paras 20-27].

Clarifications – (a) If amount in counterclaim found due and exceeds amount awarded to appellant, surplus not recoverable by respondent – (b) If any amount remains payable to appellant after adjustment, same recoverable by appellant – (c) Judgment limited to facts and terms of Paragraph 12.4.1 of the resolution plan [Paras 27-28].

Decision: Appeal partly allowed – Impugned order of Division Bench of Calcutta High Court modified – Respondent not entitled to independently pursue counterclaim but permitted to raise plea of set-off as defence before Arbitral Tribunal on terms specified – Parties to bear their own costs [Paras 30-32].

Criminal Law – Copyright Infringement – Sections 63, 65, 65A, Copyright Act, 1957 – Quashing of Proceedings – Non-Application of Mind – Appellant, a National Award-winning film director, directed 'Kahaani-2' released on 02.12.2016 – Complainant alleged that appellant had stolen his script 'Sabak', registered on 31.07.2015, and used it in the film – Criminal complaint filed before CJM, Hazaribagh – Summoning order passed on 07.06.2018 – Section 482 CrPC petition dismissed by High Court – Held: Complaint contained only bald and unsubstantiated allegations and did not even prima facie disclose any similarity between the film and the script – Statements of complainant and his witnesses equally failed to identify any feature allegedly copied – Summoning order passed mechanically without any application of mind – High Court erred in not appreciating the absence of sufficient material – Proceedings manifestly frivolous and vexatious – Appeal allowed [Paras 13-19].

Summoning Order – Application of Mind – Suppression of Material Fact – Dispute Settlement Committee of SWA comprising experts found no similarity between the rival works vide order dated 24.02.2018, prior to recording of witness statements and prior to summoning order – Complainant and witnesses deliberately concealed this order from the Court – Appellant's screenplay registered as early as 10.10.2013 and 02.12.2013, whereas complainant's script registered only on 31.07.2015 – Appellant's work clearly preceded complainant's script – Question of copyright infringement does not arise where the complainant's script was not even in existence when appellant registered his screenplay [Paras 16-18].

Section 482 CrPC – Quashing – Frivolous Proceedings – When accused seeks quashing on ground of manifestly frivolous, vexatious or malicious proceedings, court is duty-bound to examine the matter with greater care – Court need not restrict itself to averments in complaint but must look into all attending circumstances and read between the lines – Court is empowered to take into account overall circumstances leading to initiation of the case as well as materials collected in course of investigation [Para 14].

Decision: Appeal allowed – Summoning order dated 07.06.2018 passed by CJM, Hazaribagh and order dated 22.04.2025 passed by High Court of Jharkhand quashed and set aside – Complaint Case No. 1267 of 2017 pending before CJM, Hazaribagh quashed [Para 20].

Service Law – Disciplinary Proceedings – Post-Retirement Punishment – Validity – Reduction of Pay Scale – Appellant, a Punjab & Sind Bank officer, was served a charge sheet on 30.09.2011, the same date he superannuated – Charge No. 2 (failure to ensure end-use of loan) found partly proved – Punishment of reduction by three stages in pay scale on permanent basis imposed vide order dated 15.06.2013 – Appellate Authority dismissed appeal – Single Judge of High Court set aside punishment holding post-retirement penalties under Service Regulations impermissible – Division Bench reversed, relying on Regulation 20(3)(iii) and Mahanadi Coalfields Ltd. – Held: Where extant Service Regulations permit continuance of disciplinary proceedings initiated before superannuation, such proceedings can be continued and concluded post-retirement, and appropriate punishment including reduction of pay scale is permissible – Appeal dismissed [Paras 3–39].

Misconduct – Bank Officer – Failure to Ensure End-Use of Loan – Charge Proved – Appellant allowed cash withdrawals of several lacs without supporting bills, resulting in account turning NPA – Inquiry Officer found Charge No. 2 partly proved – Appellant's comments to Inquiry Report did not challenge the finding regarding absence of bills – Held: A bank officer holds a position of trust dealing with public funds; failure to ensure end-use of loan constitutes financial irregularity exposing the Bank to risk; penal action on proof of such charge cannot be questioned merely because no loss was suffered – Finding neither perverse nor disproportionate [Paras 14–22].

Disciplinary Proceedings – Post-Superannuation – Regulation 20(3)(iii) – Deeming Fiction – Regulation 20(3)(iii) of the Service Regulations provides that an officer against whom disciplinary proceedings have been initiated shall cease to be in service on the date of superannuation but proceedings will continue as if he was in service until conclusion and final order – Held: This deeming fiction permits the proceedings to be continued and brought to logical conclusion; where penalty imposed results in reduction of pay scale, pension can be computed accordingly and such punishment is implementable post-retirement [Paras 25–38].

Distinction Between Penalties – Dismissal vs. Reduction of Pay – Pension Regulations – Where ultimate penalty is dismissal, it may result in forfeiture of pension and retiral dues under Regulation 22 of Pension Regulations, raising no technical difficulty – Where punishment results in mere reduction or adjustment of pension rather than forfeiture in entirety, Court must examine implementability – In present case, reduction in pay scale relates back to date of superannuation and pension is computable accordingly – Held: Punishment is implementable [Paras 36–37].

Precedents Reconciled – Prabhakar Sadashiv Karvade Distinguished – Ramesh Chandra Sharma and Mahanadi Coalfields Ltd. Followed – In Prabhakar Sadashiv Karvade, charge sheet was served after retirement; hence substantive penalties under Service Regulations held impermissible – Distinguished on facts as in the present case charge sheet was served while appellant was in service – Ramesh Chandra Sharma approved; Mahanadi Coalfields Ltd. (three-Judge Bench) followed – Jaswant Singh Gill not followed as overruled by Mahanadi Coalfields Ltd. [Paras 27–34].

Decision: Appeal dismissed – Punishment of reduction of three stages in pay scale on permanent basis upheld – Division Bench order affirmed – No order as to costs.